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Knowledge Based Strategies in a Distant Market ContextThe case of Lenovo acquiring IBM’s PC unit

Written by Miguel Carnero, Giedre Jankauskaite, Joonas Saari, and Jonna Tuominen, USA and China


Linnæus University

Sweden


Report


Knowledge Based Strategies in a Distant Market Context: The case of Lenovo acquiring IBM’s PC unit


Author: Miguel Carnero, Giedre Jankauskaite, Joonas Saari, and Jonna Tuominen

Supervisor: Niklas Åkerman

Examiner: Niklas Åkerman

Date: 16.12.2015

Subject: Knowledge Based Strategies in a Distant Market Context

Level: Master

Course code: 15HT-4FE512



Executive summary


The following report is written for the management team of Lenovo to suggest the means for the successful transfer of International Business Machines (IBM) Personal Computer (PC) unit and its Research and Development (R&D) and production facilities as well as thousands of employees which were recently acquired by Lenovo.


The researchers have identified the gaps that were withholding Lenovo from becoming a strong global player and explained the elements to be transferred from IBM to Lenovo, as well as proposed relevant suggestions on how to seamlessly and successfully transfer the defined knowledge, resources and capabilities.


The report suggests that the main items to be transferred from IBM’s PC unit to Lenovo are the following:

● Advanced technology and R&D activities

● Overseas experience


The barriers for a successful transfer of knowledge are related to internal aspects as well as aspects from a larger context. The internal aspects are broken down into both motivational and non-motivational factors, while the external aspects provide the contrast on the different types of culture, types of economy, hierarchy and organizational styles, network systems, cognitive complexity, diverse demographics, communication styles and language.


The design process provides specific suggestions that will allow Lenovo to deal with important matters that arose when observing the barriers for a successful transfer. The report suggests the management team of Lenovo takes the following aspects into consideration and reflects on implementing them in way such as: Carry out employee cross-exchanges between the units, offer various types of training schemes for employees such as language and cultural coaching, execute team-building events, develop the staff reward system, establish a “Help-unit”, build online learning platforms, hire cultural specialists and internal gatekeepers to control knowledge flow inside the company, as well as increase Lenovo’s R&D activities. Especial consideration should be offered to the latter as evidence shows that the lack of absorptive capacity is directly related to R&D expenditure.


Summarizing, it is pivotal to heel that the transfer process will be lengthy and ideal results will not come easily. This report provides specific guidelines that will yield a prosperous outcome.



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